Bond investors are signaling they expect the Federal Reserve to lose its battle against disinflation, even after inundating the U.S. economy with more than $3 trillion in the past five years.

While central banks around the world are trying to spur demand and boost prices, signs are emerging that a slowdown in inflation is becoming entrenched. Treasury Inflation-Protected Securities are suffering unprecedented losses after inflation in the U.S. rose 1 percent last month, the smallest increase since 2009. Known as TIPS, the bonds have plunged 8.8 percent this year, the most since they were introduced in 1997, according to Bank of America Merrill Lynch indexes.

“The idea that central banks can always get the inflation rate they want is something that’s going to pass away,” Peter Fisher, the former Fed official and undersecretary for domestic finance at the U.S. Treasury, who now serves as senior managing director at BlackRock Inc., said in an interview on Dec. 9. “We could be at a 1 percent inflation rate for a long time.”

Losses on TIPS accelerated in the past month, wiping out returns in September and October, after Fed Vice Chairman Janet Yellen became the favorite to succeed Chairman Ben S. Bernanke. While Yellen has voted for every stimulus measure since 2008 and drawn criticism from some lawmakers concerned that her approach will spur too much inflation, a slowdown in price increases may pose a more imminent threat to the economy by causing consumers and businesses to put off spending.

Wishful Thinking

Companies in the U.S. are already finding ways to expand without hiring more workers and wages are mired in the weakest period of growth in at least five decades.

“It’s hard for me to see accelerating inflationary pressures unless we get some pick-up in wage expectations,” said Fisher at New York-based BlackRock, which oversees $4.1 trillion as the world’s largest asset manager.

After dropping its benchmark interest rate close to zero percent in 2008, the Fed began buying bonds with the aim of stimulating growth in an economy devastated by the worst financial crisis since the Great Depression.

While the Fed has flooded the economy with dollars to promote growth, swelling its assets to almost $4 trillion from $900 billion in 2008, investors in inflation-linked bonds are losing confidence in the bank’s ability to spur prices.

TIPS had staged their biggest rally of the year in September and October with a 2.2 percent advance as Yellen, one of the main architects of the Fed’s easy-money policies, emerged as the candidate to lead the central bank once Bernanke’s term expires on Jan. 31.